Warren Buffett’s Berkshire Hathaway (US:BRK.B) closed out its position in several US blue chip stocks as it continued to increase its cash pile. It has also pivoted away from consumer retail, while increasing its exposure to US media. Apple (US:APPL) now makes up close to half of Berkshire's equity investments, as of 30 September. The Sage of Omaha is also happy to swim in cash, with the holdings now over $150bn.
The company sold $7bn (£6.4bn) of shares last quarter while only buying $1.7bn in Q3. Its filing for the quarter showed it closed out its position in General Motors (US:GM) and games developer Activision Blizzard after its sale to Microsoft (US:MSFT) went through. It also sold out of pharmaceutical company Johnson & Johnson (US:JNJ), consumer goods companies Procter & Gamble (US:PG) and Mondelez (US:MDLZ), as well as parcel delivery company UPS (US:UPS).
Meanwhile, Buffett reduced his position in several other large cap stocks, selling 10 per cent of its Chevron (US:CVX) holding, 15 per cent of the HP (US:HPQ) position and 5 per cent of Amazon (US:AMZN).
New positions were taken in media companies Sirius XM (US:SIRI) and Liberty Media Corp (US:FWONA), as well as small position in the Atlanta Braves baseball team. Media consumption increases in the run up to presidential elections and the next one is happening in just under a year, with Donald Trump as the front runner for the Republican nominee. Sirius XM’s share price was up 6 per cent on the day of the filing, although the company is down 9 per cent so far this year.
Amazon’s share price has increased over 60 per cent this year as it has been a beneficiary of the AI hype. Its cloud computing business Amazon Web Services provides computing power to train the AI models and is expected to see an increase in demand for its services. However, over two thirds of its revenue still comes from retail services and there is evidence US consumers might be weakening.
Package delivery company UPS saw its revenue drop 12.8 per cent year-on-year to $21.1bn in the three months to September. It then reduced its full-year guidance to “reflect global macro-economic uncertainty”.
Buffett said in February the company would continue to hold "a boatload of cash" to protect against rough seas. That boat is now a Panamax tanker, however, and the question is when the company's chair decides he can do better than putting it into T-bills.
